Vale the Digital Agency

read —

10 September 2014

I’ve been reading a lot of trite about the traditional Above the Line Agency hearing an increasingly louder death knell, and the new modern amazing Digital Agency is here to save the day. Cause they get it. That in a few years it will be Digital Agencies running the land, free to roam and solve huge business problems.

The thing is that the less than humble digital agency has just as much to worry about.

While digital is most certainly changing the way that businesses conduct advertising and allocate spend, it’s still very new. It’s also far less refined and confirmed.

What it has brought us however is data, and the data to make scientific decisions about who and what we market to.
Anecdotally I was told recently that with the right data an ATL Creative Director increased the sale of a particular car from 300 units per month, to 1,000 units per month.

All by knowing that it’s exactly 19–25 year old women purchasing their first brand new car. It’s a demographic window narrow enough to be insanely precise.

While any other Digital Agency could tap into the same data and theoretically produce the same result, the reality is that the processes, experience, and market education level of the average Digital Agency is far less mature than that of say Leo Bs, Ogilvy, GPY&R, et al.

Where the market is heading is towards a hybrid agency, and it’s happening fast. Companies like Edelman Group’s acquisition of Design Royale demonstrates a shift into the merging of worlds is a realistic concept.

This stems from most digital agencies feeling that their input to a business is the most important aspect, forgetting that digital actually plays a minor part for most FMCG and similar brands. This self siloing thought process results in a very narrow minded view of a business’ communication verticals.

Customers are definitely flocking to digital touch points over analog formats (including television), yet it is unlikely that magazines, in-store displays or experiential promotions are going anywhere in the near future. They might become digital in format, but it’s not just about funnelling a conversion through a website or social campaign. It’s general awareness as well.

Digital Agencies now need to start looking for acquirers that can keep them in line enough to be relevant and not too niche, while ATL Agencies should canvas the land for Digital acquisitions.

Soon enough we’ll see traditional agency thinking being bolstered by fresh young thinking in the digital space, and all underpinned by data. He who holds the data wins.

The horizon looks bleak for agencies—in chorus above and below—with through the line coming out clearly on top. The appeal of being fresh, niche and new is also a significant risk.